Economy

ousseff also said she would continue the fight against rapid inflation. As part of that, economists expect interest rates for the country will rise even further in the coming year. She also said he wants to simplify the tax system and improve public spending, according to media reports. Rousseff was part of da Silva’s administration and is widely expected to follow his policies to expand the economy.

In the statement, American recommended that travelers use other Web services to compare ticket prices. "Customers looking to compare flights or fares online should visit other travel sites such as Kayak.com or Priceline.com Inc. (PCLN) for the most accurate and up-to-date information," the Fort Worth, Texas, airline, which is part of AMR Corp. (AMR), said. The removal of American flights from Expedia's listings comes as a conflict between the airline and travel sites ratchets higher. On Dec. 21, American pulled its listings from Expedia competitor Orbitz Worldwide Inc. (OWW). The airline hopes to drive more traffic to its own website, which it says offers "our lowest airfares" and doesn't charge an online booking fee.

Singapore is on course to be the world’s second-fastest growing economy, adding to inflation pressures that have prompted policy makers to allow faster currency gains and take steps to cool the property market. The expansion may signal Asia will in 2011 sustain an outperformance over developed markets hampered by Europe’s sovereign credit woes and U.S. unemployment that remains above 9 percent. “If Asia continues to lead growth, and the likelihood is that it will, then it would mean we would see stronger currencies around the region,” Song Seng-Wun, an economist at CIMB Research Pte. in Singapore, said before the report.

The China Federation of Logistics and Purchasing Saturday said its purchasing managers index (PMI) fell to 53.9 in December from 55.2 in November, the Associated Press reported. It was the first decline in five months, the AP noted. A reading of more than 50 indicates expansion in the economy, while a reading of less than 50 indicates contraction.

Energy

A big debate recently on EVs and PHEVs has been how to measure the miles per gallon given that - a) sometimes they use no gas at all; and b) electricity is an energy cost, even if it’s not a gallon of gas. But now I think it’s time to focus on HPM (hype-per-million): misleadingly high press popularity that masks underlying revenue model problems. Electric cars seem to be heavy on the hype — by the vendors, the business press, the general press and even politicians — while sales are barely improved from the first great coming of the EV.

Texas filed a petition with the U.S. Court of Appeals in Washington yesterday, saying the EPA didn’t give adequate notice or allow for comments on a proposed federal takeover of the state’s air permitting program on Jan. 2. Last night, the court ordered the agency to hold off on its plan while the court considers whether to delay the move until the case is resolved. The appeals court ordered the EPA to respond to Texas’s motion by Jan. 6. Challenges to federal rules are brought directly to appeals courts.

The administration says it is simply trying to enforce new safety rules adopted in the wake of the April 20 explosion of the Deepwater Horizon drilling rig, which killed 11 workers and set off the worst offshore oil spill in U.S. history. Environmental groups say the administration is right to take its time because the Gulf disaster exposed the risks of offshore drilling. But the delay is hurting big oil companies such as Chevron Corp. and Royal Dutch Shell PLC, which have billions of dollars in investments tied up in Gulf projects that are on hold and are paying hundreds of thousands of dollars a day for rigs that aren't allowed to drill.

Article suggestions for the Daily Digest can be sent to [email protected]. All suggestions are filtered by the Daily Digest team and preference is given to those that are in alignment with the message of the Crash Course and the "3 Es."

Goolsbee Says Failure to Raise U.S. Debt Ceiling Would Be `Catastrophic'

The title captures Max Keiser's vision of the suicide banker holding the gun to his head threating that if we don't give the money, he's gonna shoot. We're all scared and listening. The editor just forgot to add : and get Americans even more in debt.

"Goolsbee said the U.S. added 1.2 million private sector jobs in 2010 and cited forecasts for a “continued recovery.” The unemployment rate is currently 9.8 percent.

“You’re starting to see encouraging signs,” Goolsbee said. “And so, you know, we’ve just got to juice this, and pump it up, and get it going faster, but that’s clearly the direction that we’re headed.”

It sounds like the man is describing a rapidly expanding universe : pump it up, get it going faster => ergo, that's the direction folks, it's going up on every possible axis.

"When we predicted a few weeks ago that the US would end 2010 with $13.8 trillion in debt we miscalculated the settlement dates on all the last round of bond auctions . As a result, we are happy to announce that as of December 31, 2010, the US now has $14,025,215,218,708 and 52 cents in debt (incidentally this is an increase of $154 billion in debt on the US balance sheet overnight). As a reminder the debt ceiling is 14,294,000,000,000. Which means at a run rate of $125 billion in net monthly issuance, the US may not even get to the end of March at the current burn rate. Which also means Congress better start the discussion on raising the debt ceiling as soon as February. Which means someone is about to [win/lose] some serious cash on the Feb 28 debt ceiling hike InTrade contracts."

The Pew Research Center for the People & the Press released their year-end survey on December 15, 2010. Their pollling revealed that for the public, a tough year ended on a down note.

Consistent with the mood of the nation all year, 2010 is closing on a down note. Fully 72% are dissatisfied with national conditions, 89% rate national economic conditions as only fair or poor, and majorities or pluralities think the country is losing ground on nine of 12 major issues.

Pew's survey results are not surprising, and I would cover them in depth if it weren't for some rather important information that was buried in the next to last paragraph.

The survey finds that a majority of the public (57%) says it is very difficult or difficult to afford things they really want. About the same percentage said this two years ago (55%). And for many Americans, affording basic necessities remains a struggle – 51% say it is difficult to afford health care, 48% say the same about their home heating and electric bills, and 29% say it is difficult to afford food.

Why isn't this information Front Page News? Can you see the headline? I can see it, splashed across the top of the front page of the New York Times—

29% of Americans Say It's Difficult To Afford Food

Why haven't we seen this headline? Or this one?

48% of Americans Say It's Hard to Pay Their Heating And Electric Bills

Wikileaks' Cables Suggests that Oil Motivates U.S. Policy More than Fighting Terrorists

Cables released by Wikileaks demonstrate that control of the world's strategic energy reserves has always been a key factor in the direction of the "War on Terror".

December 16, 2010 |

Among the batch of classified diplomatic cables recently released by the controversial whistle-blowing website WikiLeaks, several have highlighted the vast extent of the financial infrastructure of Islamist terrorism sponsored by key U.S. allies in the ongoing "War on Terror."

<SNIP>

Despite such extensive knowledge of these terrorism financing activities, successive U.S. administrations have not only failed to exert military or economic pressure on these countries, but in fact have actively protected them, funneling billions of dollars of military and economic assistance. The reason is oil.

It's the Hydrocarbons, Stupid

Oil has always been an overwhelming Western interest in the region, beginning with Britain’s discovery of it in Persia in 1908. Britain controlled most Middle East oil until the end of World War II, after which the United States secured its sphere of influence in Saudi Arabia. After some pushback, Britain eventually accepted the United States as the lead player in the region. “US-UK agreement upon the broad, forward-looking pattern for the development and utilization of petroleum resources under the control of nationals of the two countries is of the highest strategic and commercial importance”, reads a 1945 memo from the chief of the State Department’s Petroleum Division.

Anglo-U.S. geo-strategy exerted this control through alliances with the region’s most authoritarian regimes to ensure a cheap and stable supply of petroleum to Western markets. Recently declassified secret British Foreign Office files from the 1940s and 1950s confirm that the Gulf sheikhdoms were largely created to retain British influence in the Middle East. Britain pledged to protect them from external attack and to “counter hostile influence and propaganda within the countries themselves.” Police and military training would help in “maintaining internal security.” Similarly, in 1958 a U.S. State Department official noted that the Gulf sheikhdoms should be modernized without undermining “the fundamental authority of the ruling groups.”

The protection of some of the world’s most virulent authoritarian regimes thus became integral to maintaining Anglo-U.S. geopolitical control of the world’s strategic hydrocarbon energy reserves. Our governments have willingly paid a high price for this access – the price of national security.

Side Note: And of course, Monsanto has persuaded the courts in Canada and in the U.S., that you are in violation of patents and must destroy your crops or hand them over (or else face a ruinous law suit) if your neighbor plants Monsanto genetically engineered crops right next to yours, and the wind causes your own crops to be cross-pollinated by them.

specializes in high-end commercial real estate and last week bought the iconic John Hancock Tower in Boston’s Back Bay for $930 million.

Zuckerman, who is also the chairman and editor in chief of the weekly news magazine U.S. News & World Reports and publisher of the New York Daily News, blamed the continuing price decline on the so-called shadow inventory of foreclosed homes that's yet to come on the market.

“We’ve seen home prices go down now for four months in a row, according to the Case-Shiller Index, by 1.3 percent in the last month," Zuckerman went on to say. "So it’s an accelerating downtrend in those prices. This is on top of three to four years of declines.”

Why isn't this information Front Page News? Can you see the headline? I can see it, splashed across the top of the front page of the New York Times—

29% of Americans Say It's Difficult To Afford Food

Here is why it won't be on the front page of the NYT:

“If I allowed my honest opinions to appear in one issue of my paper, before twenty-four hours my occupation would be gone. The business of journalists in to destroy truth; to pervert; to vilify; to fawn at the feet of mammon, and to sell this country and this race for their daily bread. We are the tools and vassals for rich men behind the scenes. We are the jumping jacks, they pull the strings and we dance. Our talents, our possibilities and our lives are all the property of other men. We are intellectual prostitutes.” ~John Swinton, former chief of Staff of the New York Times and the “Dean of his Profession”, In a toast before the New York Press Club, 1953.

Our talent, our possibilities and our lives are all the property of other men -John Swinton

[0:40] Goolsbee: If we hit the debt ceiling, that's the...essentially defaulting on our obligations, uh, which is totally unprecedented in American history

[1:38] The United States is not in danger of default. We do not have, uh, we do not have problems such as that. This would be lumping us in with a series of countries through history that I don't think we would want to be lumped in with.

Well, yes: The United States quite clearly and overtly defaulted on its debt as an expediency in 1933, the first year of Franklin Roosevelt's presidency. This was an intentional repudiation of its obligations, supported by a resolution of Congress and later upheld by the Supreme Court.

"DeMarco added that the settlement with Bank of America and a separate settlement with Ally Financial Inc. reached in December, represent an ongoing effort to enforce Fannie and Freddie claims for violations of representations and warranties on mortgages sold to the institutions. The settlements collectively provide $3.3 billion in recovery funds to the mortgage giants, he added.

However, analysts contend that the settlements and any future ones will not significantly reduce losses to taxpayers from Fannie and Freddie.

Fannie and Freddie were both taken under government conservatorship in Sept. 2008 and could need as much as $363 billion in assistance. As of October, Fannie and Freddie have drawn roughly $151 billion from the U.S. Treasury."

es2 this video you posted is amazing. Who needs a debt ceiling at all? Everyone needs an unlimited credit card where they just keep no boundaries on it at all. Surely they will be responsible right LOL...

Writing in a Spainish newspaper, Mr Li's comments are the latest sign of China's growing role in protecting the stability of the European Union,its largest export market.

"We have confidence in the European financial market, and, in particular, the Spanish financial market, which has meant the purchase of its public debt, something which we will continue to do in the future," Mr Li wrote in El País, Spain's largest-circulation general newspaper.

As the global demand for oil increased during 2010 the IEA was forced to steadily increase its forecast for average annual demand. In January the agency said that the increase over 2009 would be 1.4 million b/d. By July that had increased to a 1.8 million b/d gain and in mid-December the estimate was up to a 2.5 million b/d increase in global oil consumption. The agency notes that in the 3rd quarter global demand may have been up by 3.3 million b/d over the previous year, a rate which is clearly outstripping increases in production and indicating that a drawdown in global stocks is taking place.

As could be expected, much of 2009’s increase in demand came from China, which continued to grow its economy rapidly last year and for a variety of reasons had trouble maintaining its coal and electricity output to keep pace with economic growth. Even demand in the US increased, with total consumption of petroleum products in the last month or so running about 20.3 million b/d in December 2010 vs. 19.0 million b/d in 2009.

As annual increases in demand of 2–3 million b/d are clearly unsustainable, the IEA currently is forecasting that the global increase in demand during 2011 will subside to circa 1.3 million b/d.

If U.S. consumers are in the midst of a green revolution, the news hasn't reached car buyers.

With the end of the recession, bigger vehicles have made a comeback, sales figures show, and it has come at the expense of smaller, more-efficient cars.

Leading the growth were sales of midsize sport-utility vehicles, which jumped 41 percent through the first 11 months of the year, led by vehicles such as the Jeep Grand Cherokee and the Honda Pilot, each of which get about 18 miles per gallon.

Sales of small cars, by contrast, remained flat despite otherwise surging demand for automobiles. Sales of the Toyota Corolla and the Honda Civic declined, and even the fuel-sipping Toyota Prius, the hybrid darling of the eco-conscious, dropped 1.7 percent.

"You have about 5 percent of the market that is green and committed to fuel efficiency," said Mike Jackson, the chief executive of AutoNation, the largest auto retailer in the country. "But the other 95 percent will give up an extra 5 mpg in fuel economy for a better cup holder."

Overall, car and light-truck purchases climbed 12 percent from January to November, led by the consumer tilt toward SUVs and pickups, according to recent numbers from Autodata.

The rise in SUV sales comes as the auto industry, government officials and advertisers have been agog this year with environmental sentiment and boasts about the fuel efficiency of new battery plug-in cars, such as the Chevrolet Volt and the Nissan Leaf, which recently went on sale.

The Chinese economy is heading toward an economic hard landing; it will overshoot to the downside and become the economic Black Swan event of 2011-2012. Inflation, yes both types, will be the story in China in the coming months.

The steps necessary for an economic black swan landing have all happened, what is next is just the crash landing. The rains in Australia have cemented China’s economic slowdown. The rains will have longer lasting implications for both economies.

China is about to have its electrical grid under perform during the peak winter months as it uses Australian high grade coal to “sweeten” local Chinese sourced low grade low BTU coal for their power plants. While these plants will operate using the local coal, they will not produce the same Megawatt load they did.

China will have to import emergency supplies of Diesel to help the local factories to continue to run on their own independently powered generators.

China will end up paying at least 100% increase in high grade coal prices, year over year. This will have to be pushed into their cost structure, it is too large to absorb.

China is about to have its steel mills shut down due to a lack of available high BTU coal. This has always been the weak link in the Chinese export model. A reliance on imported raw commodities.